Protecting Against Credit Card Fraud

Credit Cards or their details are stolen (and sold) every day. When someone other than the authorized user tries to buy from your webstore, you’re involved in a fraudulent transaction. What you do to prevent it or how you respond when it happens, will determine your risk of Chargebacks.

Your Credit Card Processor provides tools to reduce the risk of fulfilling fraudulent transactions. These options can typically be set through their online dashboard, but it must also be discussed with their fraud specialists. Those feature might require further configuration in your NitroSell WSM and should be discussed with a NitroSell representative.

These features include CVV & AVS

CVV (basic protection)

A card verification value (CVV) or signature panel code (SPC) is a term for a security feature for “card not present” payment card transactions instituted to reduce the incidence of credit card fraud.
The CVV is in addition to the bank card number which is embossed or printed on the card. The CVV is used in situations where a PIN cannot be used.

The Address Verification System (AVS) is a system used to verify the address of a person claiming to own a credit card. The system will check the billing address of the credit card provided by the user with the address on file at the credit card company.
AVS verifies the numeric portions of a cardholder’s billing address. For example, if the address is 101 Main Street, Highland, CA 92346, in the United States, AVS will check 101 and 92346. Cardholders may receive false negatives, or partial declines for AVS from e-commerce verification systems, which may require manual overrides, voice authorization, or reprogramming of the AVS entries by the card issuing bank.
It should also be noted that customers can unexplainably encounter an AVS failure and choose to leave the webstore without contacting the store for more information.

Still, these systems may fail and transactions will seem authentic, so you must manually examining every order.

Manual Examination (CVV + AVS + Manual Examination = Best Protection)

What to look for…

• Unusually High Value orders
• Orders where the billing and shipping addresses don’t match
• Multiple orders from the same customer in the same day or week.
• Multiple orders use different billing addresses for the same shipping address

What to do…

• Use a search engine to look up the email address. You might find the email address published on reputable websites in relations to the customer’s name and address. This might yield matches or discrepancies. There could also be records from other retailers reporting fraud related to that address.
• Call the phone number on the order. If it’s fraud, there a good chance the phone number is invalid or incorrect. If someone answers, ask questions about the order. If they struggle to answer, something may be up.
• Use a search engine to look up the billing and shipping addresses. You may find a vacant lot or suspicious PO Box.

Summary

Remember, you and your team are the last defense against fraud. If you fail to detect a fraudulent transaction and choose to fulfill the order, you’re 100% liable when the real cardholder denies the charges, so it’s important that you’re vigilant in your screening.